To: Pete Bilden who wrote (1581 ) 9/24/1998 10:13:00 PM From: Ralph C. Cinque Read Replies (2) | Respond to
Thanks, Pete. You make a good point yourself. Even if FFS were to come back from 2 to 17, and CPPKY from sixty cents to 11, and CSRE from 3 to 29,(fat chance) it would in no way vindicate Dessauer because no one should have to go through the anguish of that kind of "paper loss" in a properly managed portfolio. Dessauer seems to be incapable of realizing that a falling stock can keep falling. Why not, as you say, at least make an attempt to identify when a stock has "bottomed out" before advising people to buy more? He said on the hotline that LSI was "compressed" at 19. That was the word he used, and it's a very compelling word. However, within days it was "compressed" all the way down to 11. But sometimes I wonder if he really cares about falling stock prices and "paper losses." I remember when he first recommended CPPKY it was at 11, and he said "buy some now and buy more if it falls to 6." My first thought was: "but that would be nearly a 50% loss???" And when he recommended Core Labs in the high 20s, he said "buy some now and buy more if it falls to 20-22." That would be about a 30% loss, but as it turned, Core Labs fell all the way to 12. (although it has since recovered some). McNeil, the guy who founded Investor's Business Daily, recommends that any time you buy a stock you make a mental commitment to sell it immediately if it falls 8% from the price you paid. Do it as a matter of discipline, he says. Sure, you'll be wrong some of the time. But you can always buy it back, and most importantly, you'll avoid the big losses such as we are seeing now with our Dessauer stocks. You know, the U.S. market really isn't down that much year-to-date, and there is just no excuse for Dessauer's dismal performance. Not Asia, not Clinton, not anything. When LSI collapsed recently, Dessauer put the blame on Asia. However, previously he had told us that LSI wasn't affected by Asia, because they made specialty, made-to-order chips, and that "there was no glut of LSI chips." You notice he always has an explanation for these investment disasters, but the fault is never his. He never re-examines his own thinking and checks his own premises. He never admits he was wrong, and that scares me. By the way, I took it up the ass on SEW as well.
